Sega Sammy announced this morning that it will see major operating losses for the previous full year and that it will have to cancel some games and make the company smaller. Blaming a challenging economic climate and a changing video game market, Sega Sammy said it will see a 7.1 billion yen loss. As a result, the company plans to "streamline organizations in the field of video game software in the U.S. and Europe."

This could mean game cancelations, studio closures, and layoffs in the future. While it confirmed that it planned to cancel some upcoming game development projects, the company has not announced what titles will get canned. The company also said that it would narrow its focus on selling strong franchises like Sonic the Hedgehog, Football Manager, Total War and Aliens.